Trade like a Tiger - after all Value means Money and Money means Value

As a value investor, you can find value in stocks that are sitting out there and yelling to you in the following manner:

• some stocks yell – hey, don’t you see value in me as I continue to rise – buy me and you’ll make money
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• some shout – hey, can’t you see value in me as I continue to slide, so sell me fast and you’ll make money

I came across a simple and vivid confession of a trader who says:

“However, given today’s uncertain times, you need to trade like a tiger hunts - patiently waiting for the best opportunity and not expending undue energy and capital in lower probability trades. As to holding positions overnight, I cannot imagine a less opportune time to extend your timeframe and hold trades beyond the day. It seems that today’s rallies and sell-offs are randomly distributed, making trades held overnight little more than coin-flips. I learned early in my trading career that my sleeping and my trading account improved once I vowed never hold a position overnight. If we are resolved to patiently wait for the best setups and exit our positions prior to each day’s close, what else should we do? “

Today we got to see a pretty turbulent and violent market that was more mysterious than a mysterious woman could be – absolutely unpredictable – it was up one minute and went down hill swiftly the next minute only to rise swiftly before you could make sense of what was actually happening.

Today, the one who traded like a tiger on say SBI could have made good money if he got in and got out at the approximately right turns – going long and short as per price action – easier said than done. Needless to mention the one who went short on SBI during post lunch session emerged the true winner. SBI rested at Rs.2500.80, down by Rs.59.90. And those who went short on Axis Bank and HDFC too emerged as winners.

Remember : the markets are providing great opportunities to every investor to make money buying/selling or selling/buying stocks virtually everyday. But you need to have the guts of a tiger to jump on your prey [ read stock ] at the opportune time and make a killing. And after you’ve made a killing you need to go into hibernation like a tiger who does not over eat – it attacks only when hungry, meaning we should not be very greedy. Trading in just one or two good stocks per day can help you make good money. But your entry and exit points should be better than the smartest guys on the street and your stop loss should not be too narrow nor should it be too wide. Again, easier said than done.

In these turbulent and shockingly uncertain times, Value to me means Money and Money means Value.

Think again and trade like a tiger – day trade or swing trade but do it like a tiger and sleep well like the King of the Jungle after making a good killing off and on.

Happy Investing!

Kishor S. Khot, [Kishor@hbjcapital.com], Equity Strategist, HBJ Capital Services Pvt Ltd